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On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Thanks for the comment, Bas. Could I ask you to classify yourself in one of the six climate change opinion categories presented in the short video on the right hand side of this page? It will help me to better put your comments into perspective. 

About hydrocarbon synfuels, I agree about the potential if we eventually get a lot of super-cheap wind/solar production peaks. The next Seeking Consensus article will be about synfuels and it appears to be the most promising modern storage technology available. However, I again have to point out that Denmark is a special case (20x smaller electricity generation than Germany and surrounded by large hydro capacity), so the Danish case does not offer generic proof of the scalability of intermittent renewables to higher penetrations. 

About the current economics of wind/solar vs nuclear, official data contradicts your statements. Economics in the developed world are fairly similar (see the US case for example) with the wind/solar greatly outperforming nuclear mostly due to political factors. In the developing world (mostly China and India), nuclear capacity costs less than double that of wind and solar (below ~$2000/kW - see here and here). When considering the capacity factor, this makes nuclear at least two times cheaper than wind/solar. However, the modular simplicity of wind/solar makes it much easier to install, thereby driving higher deployment rates in China. 

Battery costs will have to fall by at least an order of magnitude before it becomes applicable to anything other than low-volume niche applications (see my recent analysis here), so I'm afraid that proclaiming solar+batteries to be cheaper than nuclear is completely false. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Yes, I knew that this article would make me somewhat unpopular with nuclear advocates on TEC. However, when considering that I see nuclear as a sustainable energy option first and a greenhouse gas mitigation option second, my praise is not faint and (I still think) my critisism is valid.

I think Gen IV reactors, especially fast reactors, have the potential to take our global society to the next level because they essentially simultaneously increase the nuclear resource by two orders of magnitude and remove all the factors driving current societal resistance (waste, prolifiration risk and safety). However, these reactors are only projected to reach commercialization in the 2030s and will probably get off to a slow start. By that time, the world would probably already have overshot the 450 ppm target with CO2 emissions still increasing. 

My nuclear critique is only directed at claims that Gen III reactors can play a dominant role in achieving the 2 deg C target. This would require an unprecedented nuclear renaissance starting right now and proceding up to the 2030s when Gen IV reactors seemlessly take over - something which I think is essentially impossible. Gen III reactors offer only evolutionary improvements over Gen II and will therefore face similar societal headwinds to deployment. For nuclear to reach its potential, we need the revolutionary improvements promised by fast reactors. 

July 23, 2014    View Comment    

On Renewable Energy Provides 56 Percent of New Electrical Generation Capacity in First Half of 2014

What is the reason for the extremely low wind buildout? The miserly 699 MW installed thus far in 2014 is even worse than last year - the year when the US wind install rate slumped by 92% (similar to previous instances of a cancellation of the PTC). Will the impact of the latest boom in the typical boom-bust created by the PTC only be felt during the second half of 2014 and 2015?

Solar also seems to have broken the trend of rapid increases in deployment rates with the 2014 numbers being slightly lower than the 2013 numbers. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Sure, the older Chinese coal plants are very bad, but there has been a clear global trend towards more efficient plants and also to supercritical and ultra supercritical technology. Younger fleets (such as that of China) will inevitably be more efficient and cleaner than older fleets. The IEA capital cost report linked in the article assumes a rather remarkable 46% efficiency for (still incredibly cheap) new Chinese coal capacity. 

For instance, from the 2014 Energy Techology Perspecitves report:

"The efficiency of generation is increasing. Globally, 64% of plants under construction are supercritical or ultra-supercritical, up from 50% in 2012. More than 60% of subcritical units under construction are in India. Between 2006 and 2010, China retired 77 GW of old inefficient plants, with a target to retire a further 20 GW by 2015."

You can also have a look at this information sheet from the previous ETP report. It is shown that, since the turn of the century when China initiated the global coal explosion after joining the WTO (Chinese coal consumption tripled since 2001), there has been a large increase in investment in supercritical and ultrasupercritical technology as well as a marked increase in the efficiency of all technology classes.

Thus, the majority of the Chinese fleet (built after 2001) is substantially more efficient and clean than the global average (therefore my comment that "the Chinese coal fleet is mostly..."). As stated above, they are also actively retiring old inefficient and dirty plants at a very rapid rate. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

I truly hope that you are right, but I write based on the trends I see at the moment. At the moment, a global nuclear renaissance on the scale and the time-schedule necessary to meet the 2 deg target is not looking very likely.  

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

Trying to match the unbeatable emissions performance of nuclear with coal is a pointless exercise, especially in the developing world. I agree that coal-fired power generation is all but guaranteed to experience a terminal decline in the developed world (I am assuming you live in a developd country), but the developed world is becoming increasingly irrelevant in the global energy and climate picture. 

In the developing world, the Pareto principle must be utilized to get 80% of pollution control with only 20% of cost increases. For example, one study found that the non-CO2 externalities of coal-fired electricity can be reduced from 10.3-28.4 €cent/kWh to 1.6-3.0 €cent/kWh through levelized plant capital costs amounting to only about 0.7 €cent/kWh. A further 1.4 €cent/kWh in levelized capital costs can reduce the externality to only 0.5-0.8 €cent/kWh through a 99% reduction in SOx emissions and a 75% reduction in NOx emissions. The first step of trading 7.3-26.8 €cent/kWh of external costs for only 0.7 €c/kWh of additional levelized capital costs would typically be more than sufficient for the developing world. 

Sure, perhaps it is technically possible to drop 80% of the nuclear plant costs because it is only for "redundant" safety measures, but, if we assume that scrapping of regulations regarding these safety measures is feasible, this will have some effect on the frequency of black swan events like Fukushima. We both know that it is irrational, but we both clearly saw what the effect of this event was on the global outlook for nuclear power. Risking a higher frequency of such black swan events is certainly not a good strategy for overcoming the "monstrous political resistance" faced by nuclear. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

The trick is that, in the developing world, a nuclear buildout of X GW per year will cost about 3 times more than a coal buildout at X GW per year. In addition, coal can fuel equally rapid and practical expansions in the industrial sector. The skilled labour required to safely build a nuclear plant can also present an additional bottleneck. 

You are right that it is possible to build out nuclear at a high rate. France is the best example of this. However, the important thing to mention here is that France could barely manage 2% economic growth rates during the rapid nuclear buildout. This is politically unfeasible in China, India and other large developing nations. 

But this series of articles has been about the role of CCS in a strongly climate constrained world. In this sense, CCS has three very important advantages over nuclear:

1. It can retrofit existing plants, thereby preserving sunk investments

2. It can mitigate direct industrial emissions

3. It is capable of achieving negative emissions after we reach a stage of severe overshoot later this century

A possible fourth advantage is the addition of CCS to flexible gas plants to economically balance a future grid of nuclear and renewables (depends on how far we come with storage and demand response and the degree of fossil-fuel lock-in by wind/solar buildouts). 

At least the first three of these advantages are likely to be crucial if the world every commits to the 2 deg C limits. This, together with the "monstrous political barriers" that you cite is the reason why nuclear is not considered as a primary option in any of the mainstream deep decarbonization pathways as outlined in my reply to Fred W further down the thread. It will take some rather enlightening new information before I come to the conclusion that the large teams of experts at the IEA and IPCC are underestimating the role of nuclear in deep decarbonization pathways by an order of magnitude. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

This is indeed a very interesting question. Here is my theory based on the reading and thinking I have done on the subject to date: 

Firstly, it should be mentioned that material costs account for only about 10% of the capital costs of nuclear plants and labour costs (in the manufacturing of components and in the engineering/construction of the plant) are by far the most important component. In that sense the difference between nuclear and coal can be likened to the difference between a rugged, but simple pickup and and sleek sports car. The sports car would require substantially less materials, but, because it is much more sophisticated, may well be several times more expensive. 

The largest component of the "China price" is the very cheap, but still highly reliable labour (combination of a large influx of poor rural workers to cities and the Chinese work ethic). This allows China to manufacture simple things incredibly cheaply while maintaining reasonable quality. Relative to a nuclear plant, a coal plant is a pretty simple thing.

However, the composition of the Chinese labour force is changing rapidly. Costs and expertise are both rising rapidly. This allows China to do more complex things (like building nuclear plants) at a large scale, but also starts to erode the "China price" advantage. The trick is to ensure that China can build a significant number of nuclear plants before increases in labour costs lead to significant price escalations in the labour-intensive nuclear buildout process.

I don't have any reliable information on the rate at which the current body of skilled Chinese labour can safely build nuclear plants, but I do know from personal experience that finding really high quality skilled labour remains a very difficult task even if you hire in Norway where salaries and benefits are actually too good. If you want to hire people to build a nuclear plant, you would really do well to hire only the best. This can greatly limit nuclear build rates.  

About pollution control, it must be mentioned that the Chinese coal fleet is mostly very modern, highly efficient and relatively clean. Of course the fact that it is done on such an enormous scale is creating large problems, but I don't think the Chinese are cutting too many corners in the construction of their coal plants. 

July 23, 2014    View Comment    

On Why Does Politics Keep Getting in the Way of Pricing Carbon? - Part 1

Two points:

1. The CO2 prices necessary for the 450 ppm trajectory are a matter of complete political impossibility at the moment. Pushing for this CO2 price to be implemented as a tax is not going to lead to much more than continued stalemate. Jesse's research shows that this is mostly due to economic interests. My feeling is that it is primarily because climate change is not yet perceived as a real and tangible threat by the majority of the electorate. Regardless of the fundamental reason, it is fairly safe to say that pushing for sufficiently high CO2 prices to be implemented by all major polluting countries is going to be a long and frustrating process. We don't have that kind of time. 

2. The purpose of a CO2 price is not to "prevent further global warming". The purpose is to ensure that the marginal costs of climate change don't exceed the marginal benefits of cheap fossil fuel combustion. This makes the estimation of the correct CO2 price incredibly difficult. Not only must models predict future climate damages under different CO2 pricing trajectories decades into the future, but they must also predict future economic growth under these CO2 pricing trajectories. Lower CO2 prices will likely result in higher growth which allows us to discount further damages at a higher rate. The complexity of this modelling challenge is the reason why estimates of the social cost of carbon vary over an order of magnitude or more. We cannot expect of our political systems to deliver a reliable CO2 price if the magnitude of this price is so tremendously uncertain. 

The McKitrick proposal essentially addresses these two concerns. Firstly, it is a CO2 pricing scheme that can also win support from the skeptic (or luke-warm) community. Secondly, if structured correctly (where the price is not linked to the observed temepature rise, but to the future expectations of the market), it will deliver a single value of the CO2 price at any given time which can be viewed as the free market consensus, i.e. the price is set by the free market. People generally have more faith in the free market to price things than the goverment, thereby making this pricing scheme much more feasible to implement. 

The shortcomings you outlined above can potentialy be addressed while preserving these positive attributes. It just requires some willingness to actually build a business case for CO2 pricing (i.e. that there is real and direct money to be made in correctly predicting the trajectory). With every year of much talk and little action, I grow more convinced that trying to enforce a fixed CO2 tax (or CO2 emissions trajectory) on society is not going to work until we see much clearer and directly attributable negative effects of climate change 1-2 decades into the future. This delay can be very costly. 

July 23, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

As we have discussed before, CCS already stores CO2 on a multi-Mt per year scale. Sure, on a global scale this is not much, but it is good considering that CCS obviously cannot compete with unabated fossil fuel combustion without a CO2 price and CCS does not have the ideological appeal of renewables. 

The current status of CCS deployment is summarized in the latest Energy Technology Perspectives report referenced in my comment below as follows:

"As of end-2013, four large-scale CCS projects are in operation and have captured and stored approximately 55 MtCO2 in total. In addition, four large-scale enhanced oil recovery (EOR) projects that demonstrate elements of CO2 capture, transport and storage entered operation in 2013, bringing the number of projects using anthropogenic CO2 for EOR to eight. Construction of nine large-scale projects with combined potential to capture and store an additional 14 MtCO2 per year by 2016 is proceeding in Australia, Canada, Saudi Arabia, the United Arab Emirates, and the United States. Among these are two of the first projects built in the electricity sector. An additional 15 projects are in advanced stages of planning; if built, they could contribute an additional 29 MtCO2 per year."

About bio-energy, I share your skeptisism, but keep in mind that a very large carbon negative BECCS rollout can be delayed to mid-century, so we have lots of time to figure something out (perhaps along algae or microbial pathways). 

From a thermodynamic viewpoint, making hydrocarbons from nuclear energy is more inefficient than CCS (about half the exergy is lost as opposed to 10-25% for first generation CCS). And that is under the assumption that you can get sufficiently concentrated "ambient carbon" for free on a truly enormous scale. Power-to-methane operations using atmospheric CO2 generally have thermodynamic efficiencies around 40%. It would be worse for liquid and solid hydrocarbons. 

July 22, 2014    View Comment    

On Why we Need CCS - Part 5: Bridge to a Sustainable Energy Future

The immensity of the nuclear scaleup effort (and the associated electrification of everything) that will be required to achieve the 430-530 ppm scenarios is almost beyond imagination. Given that nuclear is the only energy source to have actually declined over the course of the 21st century (while coal use exploded), I would not get my hopes up. 

That being said, I'm all for nuclear and really hope that new designs live up to expectations, but it remains a capital intensive technology which is limited to new infrastrucutre for electricity production with a long history of strong societal resistance and cost escalations. For these reasons, none of the mainstream rapid decarbonization pathways (e.g. IEA & IPCC) consider a leading role for nuclear. For example, the IEA Energy Technology Perspectives 2014 report gives the breakdown of CO2 avoidance towards the 2 deg C scenario as follows:

Efficiency: 33%

Fuel switching: 10%

Power generation efficiency: 2%

CCS: 14%

Renewables: 34%

Nuclear: 7%

However, this is under the highly unlikely scenario of an idealized globally coordinated CO2 mitigation effort starting immediately and it only extends up to 2050. If climate science is correct and the world is eventually forced to commit to the 2 deg C scenario, the emissions pathway will be one of retroactive emissions cuts and large overhoot - a pathway where the unique attributes of CCS really come to the fore as described in my previous articles here and here

These longer-term pathways are perhaps best illustrated in the latest IPCC report. Take a look at Figure 7.10 here for a clear graphical representation of three different projected energy technology portfolios. 

About the discount rate, I will be very surprised if nuclear ever gets the preferential treatment of solar PV. Solar is ideologically extremely attractive to the general public while nuclear is still viewed negatively. I don't like this any more than you do, but it is the reality we have to deal with. The chances that preferential treatment of nuclear (similar to PV) takes off any time soon therefore appear to be extremely low.

In theory, since electricity capacity in China is expanding at a rate of about 10% p.a., new power infrastructure should be discounted at a 10% rate + a substantial risk premium. Underpricing of financial capital will lead to the uneconomical deployment of technologies that require high up-front investments of materials, energy and expertise, thereby slowing down deployment and hurting economic growth (and the ability to make ever increasing investments in future energy infrastructure). 

July 22, 2014    View Comment    

On Dismantling the Utility Model is the Fastest Path to a Cleaner Electricity Infrastructure

Well, the numbers are probably as official as you will get, so they are probably quite accurate. The Eurostat portal and the EIA give similar numbers, albeit with a slightly larger difference between US and German industrial rates.

I think truly heavy electricity consuming industries often have deals to buy power very close to wholesale prices and this might explain the example of the aluminium smelter you often site. Any explanation for the large remaining difference in residential electricity prices? Massive profit margins or something else?

July 22, 2014    View Comment